China island row bites into Japanese economy


Mon, Dec 10, 2012 - Page 5

The sound of Mandarin-speaking tourists and cash tills ringing have become rare in Tokyo’s upmarket Ginza District since a flare-up in a territorial row between China and Japan, Japanese retailers say.

“Until September, we had many Chinese customers and you could hear Chinese spoken in our shop,” said Mika Nakatsugawa, who trains clerks at cosmetic firm Shiseido’s flagship outlet in Ginza, the Japanese capital’s equivalent of Fifth Avenue in New York.

“Then they suddenly stopped coming. This month, some customers are coming back, but it’s very slow and nothing like before,” Nakatsugawa said.

The number of Chinese tourists — one of Japan’s biggest visitor groups behind South Koreans and Taiwanese — plunged 33 percent in October from a year ago to 71,000 visitors, the Japan National Tourism Organization said.

The figure from last year was already weak, with tourism still reeling from the quake-tsunami disaster in March last year and the subsequent atomic crisis, which sparked a dive in overall visitor numbers.

As airlines canceled thousands of flights between Japan and China when the long-standing diplomatic row was reignited in September, Ginza’s upscale retailers soon found that the once-jammed Chinese tour buses were nowhere to be seen.

To make matters worse, Chinese tourists spend more than US$2,100 on average during their visits to Japan, among the highest of any nationality, Japan Tourism Agency data show.

The flare-up in the decades-long row over the Diaoyutais (釣魚台) — an East China Sea island chain also contested by Taiwan and called the Senkakus in Japan — sparked a consumer boycott of Japanese products in China and huge demonstrations, prompting Japanese firms operating there to temporarily close stores and factories, fearing mob violence.

Tokyo’s nationalization in September of three of the islands came at a particularly bad time.

Ginza retailers were hoping for hordes of shoppers during a week-long Chinese holiday in October, but the spat kept them away.

“Shops in Ginza have been hugely damaged by the diplomatic fight, as everyone had been preparing for shopping sprees,” Nakatsugawa said. “I want the politicians to know the economic impact of this has been big.”

The damage has rippled across Japan’s economy and damaged its more than US$340 billion annual trade relationship with Beijing.

Japan’s automakers and electronics firms have seen their China sales take a huge hit, with the country’s two biggest airlines — Japan Airlines and All Nippon Airways — reporting a steep dive in sales.

Japan’s goal to boost tourist numbers to a record 9 million this year has suddenly become a “very hard” target, Japan Tourism Agency head Norifumi Ide said.

Not far from the Shiseido outlet, luggage store manager Koichi Miwa echoed the grim statistics, saying a big part of his customer base just “disappeared.”

“The number of Chinese customers literally turned to zero at one point,” Miwa said.

However, the hollowing out of Ginza may not just be a matter of Chinese consumers taking out their anger on Japan by staying at home.

Miwa suspects many Chinese feared tit-for-tat violence after Japanese in China were attacked and their businesses vandalized.

“Once Chinese people start coming here again, they will be relieved to find out they are not treated as badly as Japanese people in China have been,” Miwa said.